Performance vs objectives

We have set objectives for Growth, Balanced, Conservative and Cash in order to set the appropriate investment strategy for, and help monitor the performance of, these funds. You’ll find more information about the objectives below the tables and in our Statement of Investment Policy and Objectives.

Returns by option

Returns and objectives for periods ended 30 September 2018 (after tax and fees).

Growth

Objective: Consumer Price Index (CPI) + 2.75%

  CPI Objective
(CPI + 2.75%)
Return Return vs objective*
One year 1.91% 4.66% 7.34% +2.68%
Three years (average per year) 1.41% 4.16% 9.66% +5.50%
Five years (average per year) 1.13% 3.88% 9.71% +5.74%
Since inception (average per year) 2.10% 4.85% 6.43% +1.41%

Balanced

Objective: Consumer Price Index (CPI) + 2.25%

  CPI Objective
(CPI + 2.25%)
Return Return vs objective*
One year 1.91% 4.16% 5.33% +1.18%
Three years (average per year) 1.41% 3.66% 7.57% +3.91%
Five years (average per year) 1.13% 3.38% 7.78% +4.31%
Since inception (average per year) 2.10% 4.35% 5.80% +1.25%

Conservative

Objective: Consumer Price Index (CPI) + 1.25%

  CPI Objective
(CPI + 1.25%)
Return Return vs objective*
One year 1.91% 3.16% 2.72% (0.44%)
Three years (average per year) 1.41% 2.66% 4.31% +1.66%
Five years (average per year) 1.13% 2.38% 5.12% +2.48%
Since inception (average per year) 2.10% 3.35% 4.71% +0.80%

*The objectives for Growth, Balanced and Conservative were changed in 2015 which is why these figures don’t equal the return less the objective listed here.

Cash

Objective: S&P/NZX Bank Bills 90-Day Index after tax

  Return Return vs objective
One year 1.69% +0.30%
Three years (average per year) 1.76% +0.15%
Five years (average per year) 2.14% +0.21%
Since inception (average per year) 3.08% +0.02%

Objectives

Growth, Balanced and Conservative

Inflation erodes the value of your investment. The higher the rate of inflation, the higher the return needs to be to maintain the buying power of your savings. This is why the objectives for the three main funds are based on a margin over inflation (as measured by the Consumer Price Index). 

The other side of the equation is volatility or risk. The objective for each fund addresses the likelihood of negative returns both in terms of frequency and magnitude.

The timeframe included in each objective applies to the minimum time that an investor may have to invest in the option to achieve the objectives. The more growth-oriented the fund, the longer the timeframe. That’s because returns from growth assets can be expected to be more volatile from year to year than returns from income assets which tend to be more consistent.

Cash

Cash is designed for short-term saving where the main consideration is preserving capital (avoiding a negative return). The objective for this fund is to provide a return broadly in line with that of the S&P/NZX Bank Bills 90-Day Index after tax. There is a very small probability of experiencing a lost in any one year. There is also a risk you’re the value of your savings may not keep with pace with inflation over time.

The S&P/NZX Bank Bills 90-Day Index is designed to measure the performance of a portfolio of bank bills. Bank bills are short-term securities issued by banks, maturing over 31 to 90 days.

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